007 Producer Fires Legal Salvo At MGM

In an ongoing legal battle, the producer of the James Bond films has sued MGM/Pathe Communications for entering into a series of licensing agreements at below-market value in order to fund the leveraged buyout of MGM/UA Communications by Pathe’ Communications last fall.

Danjaq, S.A., the Swiss company controlled by Albert (Cubby) and Dana Broccoli, in a complaint filed in Los Angeles Superior Court, claimed it has been damaged by more than $20 million as a result of MGM/Pathe’s “highly irregular” activities in negotiating the licenses of the 16 United Artists Bond films.

In particular, the complaint cites the license of the MGM/UA library to Turner Broadcasting last June. The deal originally allocated $60 million to the Bond films, of which Danjaq was to be paid $20 million. But MGM/UA renegotiated the deal without Danjaq’s approval and although MGM/UA received the $60 million, Danjaq claims it has not received anything, according to the suit.

Suit charged that the improprieties included agreements for unusually long periods of time and high numbers of broadcasts, grouping the films with others in the film library and failing to exploit pay tv opportunities.

The complaint also seeks an injunction against further contract breaches and unspecified punitive damages. Also named as defendants are Tracinda Corp. and its head, Kirk Kerkorian (MGM/UA’s former majority shareholder), and former MGM/UA chief executive officer Jeffrey Barbakow.

This is the third legal salvo Danjaq has fired against MGM/Pathe in connection with the Bond film rights.

The Broccoli company first filed suit in federal court last October to prevent the merging companies from selling foreign tv rights to the 007 library at cut rate prices.

Danjaq later amended the suit to request termination of its distribution agreement with MGM/UA and a restraining order to block sale of the rights.

MGM/Pathe later countersued Danjaq, accusing the company of “conduct [ that] would create a risk of damage” to MGM’s European contractual relationships and business opportunities and of scaring off parties interested in those film rights.